Debit Cards

Consumers who purchase items with debit cards may not give much thought to whether they sign a receipt or punch a personal identification number on a keypad, but to lawyers set to debate the issue today, the distinction is crucial. The routine debit transaction is the subject of a trial seven years in the making, pitting Wal-Mart Stores Inc. and millions of other retailers against Foster City, Calif.

What happens in Costa Mesa can end up in Vegas, some unhappy victims of debit card fraud have learned, authorities said Friday. More than 440 people who used debit cards to pay for gasoline at two Costa Mesa service stations have reported funds stolen from their accounts in Sin City, said Sgt. Martin Carver, a spokesman for the Costa Mesa Police Department. Debit card information and personal identification numbers captured the week of Sept. 29 to Oct.

Q: Can you explain why in the world any consumer would possibly want a debit card? For the life of me, I can't imagine why these pieces of plastic are preferable to either checks or credit cards. --M.T. * A: First, as a quick refresher: Debit cards function as electronic checkbooks, allowing customers to tap their checking account balances to pay for goods or get cash at stores.

Rule No. 1 on the card's back shouts it out: Possession of this card by anyone other than the owner is a VIOLATION OF JAIL RULES. It is a warning to Los Angeles County Jail inmates--who use the cards to access petty cash while they are locked up--to watch their backs. The cards have sparked violence. Up to three years ago, inmates were allowed to carry cash to purchase items such as toothpaste, stationery, pens, pencils, cookies and candy bars, said Lt.

There's a string of bright red pay phones in the Tokyo International Airport lounge--and a line of travelers waiting to ring up. You lift the receiver, fumble with a few coins and look for the slot to drop them in. No slot. A man in the crowd steps forward and hands you a credit card-sized plastic card and gestures toward a slit in the phone. You insert the card and get a dial tone. An LCD screen indicates you have 500 yen in telephone time.

Debit cards, a gleam in bankers' eyes 30 years ago, have become the preferred method for people to tap their bank accounts, a free and easy alternative to paper checks, live tellers or cash machines. U.S. shoppers used them 37 billion times last year, making them more popular than credit cards (19 billion transactions) and checks (18 billion), according to the payments newsletter Nilson Report. Another estimate puts the figure at 45 billion debits. But big changes are afoot that could make it much more expensive for consumers to use the cards.

Visa U.S.A., in an experiment that may allow the credit card giant to expand outside its traditional services, plans to offer debit cards for use in the home to make automatic bill payments. Later this year, Visa will place card-reading terminals--used to initiate automatic payments--in the homes of a select list of customers from two big banks, one on the East Coast and one on the West Coast.

Some of the nation's biggest retailers will claim in federal court later this year that they have suffered $8.1 billion in damages as a result of Visa and MasterCard unfairly forcing them to accept their debit cards. Wal-Mart Stores Inc. and Sears, Roebuck & Co., along with Safeway Stores Inc., Limited Inc., Circuit City Stores Inc. and others, could recover treble damages of $24.3 billion if they prove that Visa USA Inc. and MasterCard International violated antitrust laws.

Richard Kesterson slid his debit card out of his wallet even before the cashier at a Hy-Vee grocery store in west Omaha rang up his total. Kesterson, like millions of Americans, didn't even consider paying by check. Using a debit card is easier, he said. Kesterson also eschews checks when paying his bills online, and then lets his bank keep track of his spending. "I haven't balanced my account in 10 years," Kesterson said.

Jose Manuel Aparicio had come up with all kinds of ways to stash his construction job wages: He slipped bills between pages of books hidden in his bedroom closet and stuffed money into an old sock in his laundry -- places thieves weren't likely to look. Without a bank account, "somebody can steal it," said the 20-year-old, who came to the U.S. from Mexico three years ago. "That's it, my money is gone."